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parties involved in staging this event and all aspects of the organization and publicity were discussed thoroughly and all three parties signed on the dotted line in a binding contract.
DR. HUANG (in Cantonese):-The reason why I raised the second question is because, in Mr. FUNG's reply, he has mentioned a lot on financial subsidy. I do not want to pursue the question any further.
CHAIRMAN (in English):-Well, may I clarify the position as one intimately connected with sports for 35 years and Honorary Life President of the Hong Kong Table Tennis Association. First, there was a contract of which there were three parties. The Urban Council and the International Management Group were the main parties, with the Hong Kong Table Tennis Association as the third party. The International Management Group represented the International Table Tennis Federation by franchise. They had the franchise for holding the World Cup. Secondly, there is a clearly defined relationship in international and national sports between the governing body and sponsors and thirdly, this was scrupulously observed by the Urban Services Department. So the staging of the World Cup brought world attention to Hong Kong in the Queen Elizabeth Stadium. It was a very great success by any standard, whether sports organization or stadium management was concerned, so I think the Council should be very happy. The wording that was used 'Presented by the Council' was strictly in accordance with the terms of the contract of which the Hong Kong Table Tennis Association was a signatory and they were happy about being able to find the backing for this very great event. So now we will proceed to the next item on the agenda.
MOTIONS
1. THE CHAIRMAN, URBAN COUNCIL, moved the following motion:
'RESOLVED that the audited Statement of Assets and Liabilities and Statement of Revenue and Expenditure of the Urban Council for the year ended 31 March 1980, be adopted.'
He said (in English):-The financial position was examined in public when the annual accounts were ready for audit earlier in the year. It was made known then that the last financial year had produced another small surplus. It was the seventh in a row.
However, it was also mentioned at that time that the prospect was bleak though the Council had managed so far to square the accounts each year in spite of inflationary conditions. It is gratifying enough to have a surplus every time in the face of a difficult situation but more so when in the intervening years the Council had even cut its rate percentage by a third to help out householders then coming out of recession.
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The audited accounts are now presented for consideration. They are without qualification. Whatever questions might have been put to the Urban Services Department have been answered presumably to the auditor's satisfaction. All the same, the Council has asked the department to report on action taken to set right such observations as might have been made on the operations of the administration.
Once again and perhaps predictably, the warning has to be sounded. It would not be honest to do otherwise. The Council cannot engage in any form of public deception. On the contrary, it has always been scrupulously careful to tell all. While Hong Kong may have escaped so far the financial plight of major cities fortuitously or by good management, inflation has caught up with it at last.
The aggravating factor is the payroll. It takes the lion's share of all revenue. In the year under review, staff salaries were raised three times. The annual increment was reinforced by two upward adjustments of salary scales with retrospective effect which the Government awarded without consulting the Council.
Nobody begrudges the civil servants their keep. But the money has to be found from the ratepayer in the Council's case. And, let it be made known at once, it has no inflationary-related major source of revenue to foot the bill while the Government has many without doubt and can take such increases in stride. The Council's only substantial revenue is the rate. This has only crept up in recent years and lags far behind galloping salaries.
Thus, there is little or nothing left for operational purposes, capital constructions and essential activities. Indeed, when the Council was reconstituted and given control over its finances seven years ago, the proportion of rate revenue to the payroll was 1.29 to 1. In the budget under preparation for 1981/82, it will be seen that salaries have left rate income way behind. All attempts to persuade the Government to make good the difference and so be fair and reasonable to the ratepayer have failed. The Council asked the Government to:
(1) make an internal adjustment of the rate percentage between the two without asking the public to pay more as the Government gets 71% while the Council has 4%; or
(2) index the rate percentage automatically to the total staff salaries in the original proportion of 1.29 to 1, with the Government paying the Council the difference out of their funds because the Council has no control over pay-levels set by them; or
(3) grant the difference between the expected higher rate yield based on the promised property re-assessment, not carried out in the event, and the present level of revenue falling due to the Council.
The Government is awash with money from their inflation-prone revenues, such as land sales and corporation profits tax, to name only two, but they
Page 44 of 120
Page 44 of 120
56
HONG KONG URBAN COUNCIL
parties involved in staging this event and all aspects of the organization and publicity were discussed thoroughly and all three parties signed on the dotted line in a binding contract.
DR. HUANG (in Cantonese):-The reason why I raised the second question is because, in Mr. FUNG's reply, he has mentioned a lot on financial subsidy. I do not want to pursue the question any further.
CHAIRMAN (in English):-Well, may I clarify the position as one intimately connected with sports for 35 years and Honorary Life President of the Hong Kong Table Tennis Association. First, there was a contract of which there were three parties. The Urban Council and the International Manage- ment Group were the main parties, with the Hong Kong Table Tennis Association as the third party. The International Management Group represented the International Table Tennis Federation by franchise. They had the franchise for holding the World Cup. Secondly, there is a clearly defined relationship in international and national sports between the govern ing body and sponsors and thirdly, this was scrupulously observed by the Urban Services Department. So the staging of the World Cup brought world attention to Hong Kong in the Queen Elizabeth Stadium. It was a very great success by any standard, whether sports organization or stadium management was concerned, so I think the Council should be very happy. The wording that was used 'Presented by the Council' was strictly in accordance with the terms of the contract of which the Hong Kong Table Tennis Association was a signatory and they were happy about being able to find the backing for this very great event. So now we will proceed to the next item on the agenda.
MOTIONS
1. THE CHAIRMAN, URBAN COUNCIL, moved the following motion:
'RESOLVED that the audited Statement of Assets and Liabilities and Statement of Revenue and Expenditure of the Urban Council for the year ended 31 March 1980, be adopted.'
He said (in English):-The financial position was examined in public when the annual accounts were ready for audit earlier in the year. It was made known then that the last financial year had produced another small surplus. It was the seventh in a row.
However, it was also mentioned at that time that the prospect was bleak though the Council had managed so far to square the accounts each year inspite of inflationary conditions. It is gratifying enough to have a surplus every time in the face of a difficult situation but more so when in the intervening years the Council had even cut its rate percentage by a third to help out householders then coming out of recession.
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Page 44 of 120
57
The audited accounts are now presented for consideration. They are without qualification. Whatever questions might have been put to the Urban Services Department have been answered presumably to the auditor's satisfaction. All the same, the Council has asked the department to report on action taken to set right such observations as might have been made on the operations of the administration.
Once again and perhaps predictably, the warning has to be sounded. It would not be honest to do otherwise. The Council cannot engage in any form of public deception. On the contrary, it has always been scrupulously careful to tell all. While Hong Kong may have escaped so far the financial plight of major cities fortuitously or by good management, inflation has caught up with it at last.
The aggravating factor is the payroll. It takes the lion's share of all revenue. In the year under review, staff salaries were raised three times. The annual increment was reinforced by two upward adjustments of salary scales with retrospective effect which the Government awarded without consulting the Council.
Nobody begrudges the civil servants their keep. But the money has to be found from the ratepayer in the Council's case. And, let it be made known at once, it has no inflationary-related major source of revenue to foot the bill while the Government has many without doubt and can take such increases in stride. The Council's only substantial revenue is the rate. This has only crept up in recent years and lags far behind galloping salaries.
Thus, there is little or nothing left for operational purposes, capital con- structions and essential activities. Indeed, when the Council was reconstituted and given control over its finances seven years ago, the proportion of rate revenue to the payroll was 1.29 to 1. In the budget under preparation for 1981/82, it will be seen that salaries have left rate income way behind. All attempts to persuade the Government to make good the difference and so be fair and reasonable to the ratepayer have failed. The Council asked the Government to:
(1) make an internal adjustment of the rate percentage between the two without asking the public to pay more as the Government gets 71% while the Council has 4%; or
(2) index the rate percentage automatically to the total staff salaries in the original proportion of 1.29 to 1, with the Government paying the Council the difference out of their funds because the Council has no control over pay-levels set by them; or
(3) grant the difference between the expected higher rate yield based on the promised property re-assessment, not carried out in the event, and the present level of revenue falling due to the Council.
The Government is awash with money from their inflation-prone revenues, such as land sales and corporation profits tax, to name only two, but they
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